Personally I leave them as they are for the most part. I lead my path to it and maybe do a little bit of overlap but I don't really like covering the whole thing myself. My main town - Serenade - is the better example of this, I still have space to put items down and it doesn't get too messed up by Redd or special events, and I have space up by my gate to do little trades (up to a bit more than a full furniture series) feel free to visit my dream to see it.
I don't really like how the path won't go right up against buildings and the door area has that gap at like the plaza and retail and the town hall so I try to play into it instead of having that random 2 space gap where the in game stone shows through like it does.